GST not leviable on liquidated damages claimed on account of breach of contract

Krazybee Services Private Limited Vs Additional Director (Karnataka High Court) Karnataka High Court held that liquidated damages on account of breach of the contract is not taxable under the provisions of Central Goods and Services Tax Act [CGST Act] in terms of circular no. 178/10/2022 dated 03.08.2022. Accordingly, the petition is allowed. Facts- The present petition has been filed by the petitioner. It is mainly contested that the amount paid as compensation by the Lending Service Provider to the petitioner is in the form of ‘liquidated damages’ and is not taxable under the provisions...